The founder of TheOptionClub.com provides ramblings and insights based upon his experience as an options trader and the adventures of running the popular stock options trading web site.
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This post is intended for those of us with IRA accounts who are looking for safe, reliable methods of investing our retirement dollars and grow that wealth. Mutual funds have traditionally been the first choice of many financial advisers, but that is rapidly changing.
A growing number of advisers are switching from expensive, fee laden funds to other more flexible financial products. These products are Exchange Traded Funds, which offer the safety of diversity, just like mutual funds, but offer many other benefits.
Take a few minutes right now to learn more about why mutual funds may be hurting you, especially with this year's market, and why you may very well experience quite different results by using a different financial product and by adopting a well conceived financial game plan.
Look...
We had a nice little rally in the market yesterday. It is quite possible that we'll see some additional upside for the next several days. The smart money says this is a "bear market rally," meaning that we'll run for a bit and then head lower.
Mutual fund investors may breath a sigh of relief over the next day, or several days, but if (when) we do head lower their funds will likely head lower too. That bear market rally did them absolutely no good!
There is a better way, though. We know that in every market someone is making money. It just hasn't been you...at least not yet, anyway.
Click on the image above and the video will start up automatically, without need to register or take any further action. Just click, sit back, and learn...
Good morning! It's Saturday and I have a 9:00 a.m. appointment with a trainer. Ever since I turned 40 it's like the warranty expired. I used to cruise into the gym, lift a little weight, jump on a stair climber, and I was good to go. Now I pay some young in-shape guy to inflict pain on me, and still slowly lose the battle.
I feel a little like Friday's market...
Friday morning, we opened up. In fact, the NASDAQ gapped up and advanced 1% during the first hour. It just wasn't meant to be, though.
All of the major indexes closed lower for the day.
We're still in a rally, but this market needs to get some momentum going if its going to break out of its current bearish trend. I haven't seen that momentum yet, and today I'm feeling pretty good about that call premium I sold.
But, hey! The guys on CNBC were saying yesterday that the bottom is here... Did you notice that red trade triangle come in there Thursday on the S&P 500? Could this downward trend continue?
Look back on the posts a few days. I posted a chart with Fibonacci levels, and surmised that 1,170 was not out of the question. Yeah, we've got to be questioning whether the bottom is really here.
Don't get me wrong... I don't mean to be negative, but my money is on the line here so I do want to be realistic and pay attention to the probabilities. Just spend some time thinking about what it would mean for you if we go to 1,170 and have a plan in place if that happens...
I spend a lot of time emphasizing why we all need to have some form of trading and investing plan. If you listen to CNBC for your guidance, you'll be buying the wrong stuff and the wrong time. You need some thing more objective.
That's one very big reason why I'm a fan of Bill Poulos' new course. It's objective. It's rule based. It filters out all of the noise and just focuses on what's actually happening in the market, identifying a trend, finding a safe point of entry, and then applying an effective money management discipline. Check out the review of ETF Profit Driver if you need more info on that.
So, with the idea of making ourselves more disciplined, more sophisticated traders, it is time for our 6th Traders Whiteboard lesson.
Now, if you've missed any of these just scroll back through the blog posts and you'll find the prior five. Those videos are still up, and each of them is just a few minutes long.
In this 6th lesson, we get into the interplay between fundamental and technical analysis. The whole video is a little under 7 minutes in duration, but it touches upon a couple key concepts so it's time well spent.
Come back tomorrow and I'll have a seventh trading lesson for you...
Bill Poulos' new course is getting lot's of attention. I know what you're thinking about that, too.
Is this a big deal? Right?
So, I've been using every spare moment I have had over the last few days to work through the advanced copy of the course that I talked Bill into sending over to me. I've been up to 1:00 a.m. one night, 1:30 a.m. the next...
The reason I've been doing this is to get a full review out, before the course goes on sale, so you know exactly what this thing is all about.
I have to be honest about the course, and I'll tell you that my guess is that far too few people will pick up a copy. I'm serious about that, too.
There are two mistakes that I see made over and over and over. They're made by novice investors as well as some seasoned traders who should know better.
Those mistakes are 1.) trading without a plan, and 2.) taking on too much risk.
If those same people who have been guilty of making those mistakes picked up a copy of Bill Poulos' ETF course and really gave it their attention, I don't think they'd ever make those mistakes again.
The course is solid. It provides a good background on ETF's and trading fundamentals. Bill then walks you through four trading methods in step-by-step fashion.
Why four?
Keep in mind you're only trading the ETF's to the upside. You can get bearish, but trust me even then you're just trading upward trending funds.
One method is designed to identify and jump on board break outs. This is the start of a new trend.
A second method puts you into a trend that is already in place and moving forward. You're just jumping in at a point of relative safety.
The third method comes into play after that new trend has experienced its first real consolidation, pulling back to support. That's were you'll get in for further upside.
Once the trend breaks down, the fourth and final method positions you to get in as the upward trend re-emerges from the consolidation. If you're familiar with Elliot's Wave Theory, think a Type 2 trade as the market transitions from a Wave 4 to a the impulse Wave 5.
This is well suited for retirement accounts, educational accounts, etc.
I know that I promised a complete review, and I finished it last night. Take a few minutes and give it a read because I go into the course in quite a bit of detail. Feel free to send me any questions that you may have, or just post a comment here on the blog.
I've go a few things to cover today, so if you don't want to miss any of them be sure to check out the whole post.
Current Market Analysis
Interesting. Before the market opened this morning, the futures were trading higher and it looked like we were going to see some upside.
It's about an hour into the trading day as I type this and I've been watching the big cap indexes fluctuate between positive and negative. The RUT and NDX have pretty much remained in the red, and in the last several minutes I've watched all the broad based indexes get negative.
My analysis is unchanged from what I posted on the blog yesterday, so just check that out if you're curious.
A Free Copy of ETF Profit Driver?
I've seen Bill do this before. He's going to give away a free copy of his ETF Profit Driver course before they release it for sale. He even pays shipping and handling...
If you're interested, you just need to tell him why you should be the one he gives it to. You can do that here:
I'd really like to see someone from TheOptionClub.com win the free copy, so take a couple minutes and throw your name in the hat!
Options Trading Service Webinar TONIGHT!
This is last minute and I do apologize, but I just learned about this last night...
A short while ago, Options University hosted a live webinar to profile some significant updates to their trading service. The presentation was plagued with some technical problems, so they're hosting a repeat of the presentation.
The presentation features Ron Ianieri, who will give you a "behind the scenes" look at what they do.
It is tonight at 9:00 p.m. EST, so you need to get signed up and
What's Coming Tomorrow...
With tomorrow being the end of the week, I'll be posting the next lesson in the Traders' White Board series.
This series is a free education course on the basics of technical analysis. I posted the first three lessons last Friday, Saturday and Sunday. I'll be doing the same this weekend.
Each lesson is a short video, focusing on one discreet topic. So, set aside ten minutes tomorrow, and over the weekend, to visit the blog and brush up on your T&A skills...
Oh! Don't forget. I'll be getting that ETF Profit Driver review up as well...
We had some significant gains yesterday. That's the second day in a row that we saw buying across the broad spectrum of the market.
Volume was off yesterday, as compared to Thursday, but keep in mind that Thursday was options expiration so some fall off in volume is only natural.
Nonetheless, the trend on the charts is still negative. I believe the major indexes have all re-taken their 50-day moving averages, but I'm still looking at a downward sloping trend line that must be broken if this now confirmed rally is to turn into something meaningful.
With the upward surge, I took the opportunity to sell some call premium. I may have to buy those shorts back if this rally pushes higher, but I'm playing the established trend. I do have hedges in place so if we do see the market run I should still be okay.
Preview Of ETF Profit Driver
I will be continuing our educational video series, but today I have other news. Next week, Bill Poulos is releasing his ETF Profit Driver course. Almost all of my trading and investing now centers on Exchange Traded Funds, so after reading his report I was very interested in this course.
Bill and I go back a few years now. I got in touch with him, basically told him I wanted an advance copy of the course so I could dive into it and provide my members with a product review before it releases. We worked it out and I'm plowing through the material now...
A full review should be ready by the weekend. What can I tell you so far?
The course focuses exclusively on Exchange Traded Funds that are moving higher in value. There is no short selling, so you don't need a margin account. That means its good in an IRA and most 401k plans that give you a brokerage option.
ETF Profit Driver is designed to put you into trades at relatively safe points, when the underlying fund is trending higher. There are four distinct entry methods, so if you miss the trend when it first emerges you have three other methods of jumping on board at times when the odds are in your favor.
Where the course really distinguishes itself is in its well documented money management methods. Every time you open a position, you know exactly where to place your stop to limit whipsaws while effectively preserving your capital.
As the trend develops, you want to adjust that stop so that you effectively lock in profits while still giving the market room to move consistent with its established trend. ETF Profit driver provides explicit instruction on how and when to make those adjustments.
Finally, all good trades must come to an end and preferably conclude before a profit turns into a loss. The profit exits are designed to do just that and are also detailed within the course.
The end result is that after mastering the course materials, you will have what amounts to a fairly conservative "all weather" trading system.
You're trading ETF's, not individual stocks. You're not day trading or selling short. Capital is only exposed to the market when there is reason to believe that the probabilities are in your favor. Most importantly, you have a detailed plan for limiting losses.
Once I get the full review done, I'll announce it here on the blog so check back. I will also be continuing with those video trading lessons, another reason to stay tuned in.
Posts
Take a few minutes right now to learn more about why mutual funds may be hurting you, especially with this year's market, and why you may very well experience quite different results by using a different financial product and by adopting a well conceived financial game plan.
